Log in/Register

Please log in or register to continue. Registration is free and requires only your email address.

Log in

Register

Emailrequired

PasswordrequiredRemember me?

Please enter your email address and click on the reset-password button. You'll receive an email shortly with a link to create a new password. If you have trouble finding this email, please check your spam folder.

Karl-Theodor zu Guttenberg is a former German Minister of Economics and Technology, Chairman of Spitzberg Partners LLC, and a nonresident distinguished statesman at the Center for Strategic and International Studies.

It is good to see such knowledge finally getting to a wider audience. Organisers of 'complementary currencies', like the Wörgl experiment mentioned, have known for decades that groups of businesses or citizens can 'create money' just like a bank does.

It is a larger field than highlighted in this article. For instance, this year the Swiss WIR Bank celebrates 80 years of continuous operation of its unique WIR Credits that are issued alongside loans in Swiss francs, serving 60,000 SMEs. The Brazilian Banco Palmas has created a successful model for local currencies created by people in poverty that is replicated all over the country. The business to business exchange industry is worth billions of dollars. And now local authorities in Brixton and Bristol in England and in 2015 Nantes, France are backing the creation of regional currencies.

In September I wil be running workshops for the City of Hull (mentioned in the article) and for Welsh Assembly Government about the creation of regional currencies. This is a rapidly emerging field that is a direct response to the financial crisis and the 'bankruptcy' of conventional approaches to provide a stable medium of exchange.

Read my Guardian article from June 2013 on how local authorities are using local currencies: http://www.theguardian.com/local-government-network/2013/jun/17/bristol-pound-local-currencies

For an overview of the field of local currencies, watch the Prezi I created:
http://prezi.com/byn39kcf9s2g/local-money/

Then read "People Money - the Promise of Regional Currencies", which I co-authored with Margrit Kennedy and Bernard Lietaer: http://www.triarchypress.net/people-money.html

and "Local Money - What Difference Does It Make?":
http://www.triarchypress.net/local-money.html

Stopping the deluge of money that gets created with the single minded purpose of fueling speculation whether in stocks or in bonds or in real estate must be a step that should be preceded by measuring this flow; the quality of credit never gets measured by its end use and there is absolutely no visibility on this. Central banks would have done better to measure this as this flow does precious little to improve GDP.

“banks are not financial intermediaries; they are money creators.”??? That claim by Werner and Guttenberg is very questionable and for reasons I in sections 1.12 and 3.1 here:
http://mpra.ub.uni-muenchen.de/57955/1/MPRA_paper_57955.pdf

Nice article brilliantly explains the role of banks in creating money.
But how does a currency becomes international why all World trade are done in dollars, and since there are practically no commodity based currencies how does the value of money fluctuates.

The BOE's decision to use lending directives was a measure born of desperation; so is this whole scheme. It's just very difficult to channel investment towards new capital expenditures rather than current assets when real interest rates are so low. Some sort of fiscal measure -- probably wealth taxes -- are necessary to discourage excess saving, raise real interest rates and channel investment towards higher yielding assets. It is interesting, however, that Piketty's recommended solution for wealth inequality might also be useful in controlling bubbles and treating the macro doldrums that have settled on industrial economies.

gamesmith94134: How money is made
It was what Cuban did? but they prefer dollars to shop in Miami.
"By implementing safeguards that ensure that credit serves productive and public purposes, policymakers can achieve debt-free, stable, and sustainable economic growth." then Ms. Yellen can sweep foreign or domestic debt under the rug, and she might not have to ponder when or how appropriate is raise the interest rate. Perhaps, we can eliminate exchange rate too; and a dollar for a rupee shouldn't be a problem if we can print them. Every American will made million and the Indian too.
Kindergarten? $100,000 for his or her birth right and we beat Saudis; and American government will give them jobs they enjoy too. It is not euphoria; and everyone is scare of the DJ is coming to a correction. Who cares if it is how money is made? they like dollar, don't they?